Triple Point takes Qmastor

AND so it ends. Connecticut-based Triple Point Technologies has announced it has acquired Australian pit-to-port software maker Qmastor, bringing the (at times) acrimonious takeover to a close.
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Noel Dyson

Qmastor’s mining supply chain solutions are used to manage more than 1 billion tonnes of coal and mineral movements a year.

The bulk of its work is in coal, which is what attracted Triple Point, which provides software to manage energy and commodity trading and enterprise risk.

Triple Point chief executive officer and president Peter Armstrong said the company’s product strategy was to provide the deepest functionality from upstream to downstream in each commodity class.

“Given the importance of coal to future global economic growth, the addition of Qmastor to the Triple Point portfolio is extremely compelling,” he said.

“Qmastor solutions are a perfect addition to the Triple Point portfolio in that they supply all the functionality to optimise an end-to-end coal and mineral supply chain, while at the same time being completely complementary to the rest of the Triple Point product set.”

Former Qmastor managing director Trent Bagnall has been named Triple Point’s MD of coal and mineral supply chain solutions.

“Integrating with a larger, successful organisation gives us the resources and reach to accomplish our ultimate goals,” he said.

“This is an important time in the mining software market and our joining of forces will underpin and accelerate our growth.”

Interestingly, in its announcement of the Qmastor acquisition, Triple Point highlights the “outstanding financial performance of Qmastor – in terms of strong revenue growth, healthy profit margins and a solid balance sheet”

It is a different tune to the one it was singing in June when it launched its initial takeover offer at just 23c a share.

Back then, Armstrong said Qmastor had failed to capitalise on the mining boom in recent years and it was reflected in its poor return of 4.3% on earnings before interest, tax, depreciation and amortisation to shareholder funds for the 2009-10 financial year.

“During the past six months, Qmastor has significantly underperformed [in] the S&P/ASX 200 index and our bid will remove the uncertainty and risks that shareholders would be exposed to through an ongoing ownership of Qmastor shares,” he said.

Triple Point chief financial officer Oni Chukwu also branded Qmastor’s board as “unprofessional” for the way it handled the takeover offer.

Not surprisingly, Qmastor hit back at both the Triple Point offer and criticism.

Just days after the Triple Point barbs, Qmastor released its 2010-11 forecast, highlighting a 74% increase in revenue on 2009-10 and a 592% hike in EBITDA.

Bagnall also hit back at Triple Point’s suggestion the Qmastor board had been unprofessional.

He said Triple Point had approached Qmastor six months prior to its offer materialising, seeking to do some due diligence, which Qmastor had assisted it with.

Triple Point’s offer then came a day after Qmastor had held its board meeting.

The offer came with a 10-day acceptance period.

Bagnall said the company had asked for an extra two and a half weeks so its directors could properly review the offer.

“They gave us a one-day extension and on the following day withdrew the offer,” he said.

Bagnall said the offer had been considerably higher than the 23c a share offer that was eventually put to the market.

One thing that stood in Qmastor’s favour was a blocking stake held by Microequities Asset Management and Coal Link.

Together they held 11% of Qmastor and Triple Point’s bid came with a 90% acceptance condition.

This, probably more than anything, led Triple Point to sweeten its offer to 31c a share – valuing Qmastor at $26.2 million.

The Qmastor board recommended the offer to shareholders and the acceptances rolled in.

This story first appeared in ILN's sister publication